UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K 

 

CURRENT REPORT

 

Pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934
 

 

Date of Report (Date of earliest event reported): May 10, 2021

 

CarLotz, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 001-38818 83-2456129
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

 

611 Bainbridge Street, Suite 100

Richmond, Virginia 23224

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (804) 728-3833

 

Not Applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on Which Registered
Class A common stock, par value $0.0001 per share   LOTZ   The Nasdaq Global Market
Redeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share   LOTZW   The Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition.

 

On May 10, 2021, CarLotz, Inc. issued a press release announcing its financial results for the three months ended March 31, 2021. CarLotz will host an earnings conference call and webcast, Monday, May 10, 2021 at 5:30 p.m, Eastern Daylight Time. The conference call may be accessed by calling 1-833-962-1461 (U.S.) or 1-929-517-0392 (International) and the Conference ID is 8006869. A live webcast of the conference call will also be available on the investor relations page of CarLotz’ website at investors.carlotz.com. The call will be hosted by CarLotz’ Chief Executive Officer, Michael W. Bor, and Chief Financial Officer, Thomas W. Stoltz. The press release dated May 10, 2021 is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference in its entirety.

 

Item 9.01.Financial Statements and Exhibits.

 

(d) Exhibits

 

See the Exhibit Index below, which is incorporated by reference herein.

 

EXHIBIT INDEX

 

Exhibit No.   Exhibit Title
99.1   Press release dated May 10, 2021

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  CARLOTZ, INC.
   
Dated: May 10, 2021 By: /s/ Rebecca C. Polak
  Name: Rebecca C. Polak
  Title: Chief Commercial Officer and General   Counsel

 

 

 

Exhibit 99.1

 

CarLotz Announces Record Revenue and Retail Unit Sales in First Quarter 2021

 

First Quarter Revenue Growth of 123% to $56.6 million, Ahead of Expectations

 

First Quarter Unit Sales Grew 76% to 2,554, Ahead of Expectations

 

May 10, 2021 – Richmond, VA – CarLotz, Inc. (“CarLotz” or the “Company”), a leading consignment-to-retail used vehicle marketplace, today announced financial results for the first quarter ended March 31, 2021.

 

Highlights of First Quarter 2021 Financial Results

 

·Net revenues increased 123% to $56.6 million from $25.4 million in the same period in 2020

 

·Retail unit sales were 2,554 compared to 1,453 in the prior year period, an increase of 76%

 

·Net Loss attributable to common shareholders was $(15.0) million, or $(0.15) per diluted share, for the first quarter 2021 versus $(1.5) million, or $(0.03) per diluted share in the prior year period

 

·Adjusted EBITDA was $(16.9) million compared to $(1.4) million in the first quarter of 2020

 

Michael Bor, Chief Executive Officer and co-founder of CarLotz commented: “We are excited to announce that, in advance of much of the growth we are driving this year through new hub development and nationwide expansion, we already are posting a 123% growth in revenue. We sold a record 2,554 retail units during the first quarter, opened three new hubs in Seattle, WA, Merritt Island, FL and Nashville, TN. And, we have announced planned new hub openings in Charlottesville, VA, Bakersfield, CA, Highland Park, IL, and Clearwater, FL in the coming months. We have been very pleased with our new hub performance to date and have signed close to a dozen leases and have several more leases under negotiation for 2021 and 2022 sites.”

 

The following compares our first quarter results to our previously provided first quarter guidance:

 

  Guidance Results  
New Hub Openings Three Three Met Expectations
Retail Units Sold 1,900 to 2,100 2,554 Exceeded Expectations
Net Revenue $42 to $46 million $56.6 million Exceeded Expectations
Gross Profit $1.6 to $2.0 million $2.0 million Met Expectations
Retail Gross Profit per Unit (“Retail GPU”) $1,300 to $1,500 $1,182

Below Expectations

 

 

SG&A Expenses $17 to $19 million $18.9 million, excluding non-cash stock compensation expense of $42 million Met Expectations
Net Loss $(16) to $(15) million $(15) million Met Expectations

 

 

 

 

For 2021, the Company confirms its previous guidance, with certain changes noted below, and expects the following:

 

2021 Guidance
New Hub Openings 14 to 16 hub openings, most of which are expected to open in the back half of the year No change
Retail Units Sold 18,000 to 20,000 with 13,000 to 15,000 in the second half of year No change
Net Revenue $335 to $375 million No change
Gross Profit $30 to $37 million No change
Retail GPU $1,800 to $2,000 No change
SG&A Expenses $103 to $108 million, excluding non-cash stock compensation expense expected to be approximately $52 million Providing separate guidance for SG&A and non-cash stock compensation expense
Adjusted EBITDA* $(79) to $(67) million Providing Adjusted EBITDA guidance instead of Net Loss guidance as a result of the change in the accounting treatment of the Company’s warrants
Weighted Average Common Stock Shares Outstanding 111 million Updated from 113.6 million to 111 million
Capital Expenditures $45 to $50 million No change

 

*A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for our full year 2021 guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, these costs and expenses that may be incurred in the future. We have provided a reconciliation of GAAP to non-GAAP financial measures for our first quarter 2021 in the Reconciliation of Non-GAAP Financial Measures section that follows.

 

Webcast and Conference Call Information

 

A conference call to discuss the first quarter 2021 financial results is scheduled for today, May 10, 2021 at 5:30 pm ET. Interested parties may listen to the conference call via telephone by dialing 1-833-962-1461, or for international callers, 1-929-517-0392. A telephone replay will be available until 11:59 pm ET on May 17, 2021 and can be accessed by dialing 1-855-859-2056, or for international callers, 1-404-537-3406 and entering replay Pin number: 8006869.

 

The conference call webcast will be available at www.investors.carlotz.com.

 

 

 

 

About CarLotz, Inc.

 

CarLotz is a used vehicle consignment and Retail Remarketing™ business that provides our corporate vehicle sourcing partners and retail sellers of used vehicles with the ability to access the previously unavailable retail sales channel while simultaneously providing buyers with prices that are, on average, below those of traditional dealerships. Our mission is to create the world’s greatest vehicle buying and selling experience. We operate a technology-enabled buying, sourcing and selling model that offers a seamless omni-channel experience and comprehensive selection of vehicles while allowing for a fully contactless end-to-end e-commerce interface that enables no hassle buying and selling. Our proprietary Retail Remarketing™ technology provides our corporate vehicle sourcing partners with real-time performance metrics and data analytics along with custom business intelligence reporting that enables price and vehicle triage optimization between the wholesale and retail channel. Through our marketplace model, we generate significant value for both sellers and buyers through price, selection and experience.

 

Forward-Looking Statements

 

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward-looking statements include statements that are not historical facts, such as statements concerning possible or assumed future actions, business strategies, events or results of operations, including statements regarding CarLotz’ expectations or predictions of future financial or business performance or conditions. Forward-looking statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Such statements are based on management’s current expectations and are not guarantees of future performance. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause such differences include those disclosed in CarLotz’ filings with the SEC, including those resulting from the impact of the ongoing Covid-19 pandemic on our business and general business and economic conditions and our ability to successfully execute our geographic expansion plans. Forward-looking statements speak only as of the date they are made, and CarLotz is under no obligation, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

 

Investors:

 

CarLotzIR@icrinc.com

 

Media:

 

CarLotzPR@icrinc.com

 

 

 

 

CarLotz, Inc. and Subsidiaries — Condensed Consolidated Balance Sheets

 

(unaudited)

 

(In thousands, except share data)

 

   March 31,
2021
   December 31,
2020
 
Assets          
Current Assets:          
Cash and cash equivalents  $74,362   $2,208 
Restricted cash   227    605 
Marketable securities – at fair value   173,644    1,032 
Accounts receivable, net   9,324    4,132 
Inventories   9,311    11,202 
Other current assets   6,655    6,679 
Total Current Assets   273,523    25,858 
Marketable securities – at fair value   44,780     
Property and equipment, net   2,349    1,868 
Capitalized software   2,554     
Lease vehicles, net   58    173 
Other assets   3,337    299 
Total Assets  $326,601   $28,198 
Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit)         
Current Liabilities:         
Long-term debt, current  $55   $6,370 
Floor plan notes payable   4,125    6,039 
Accounts payable   9,423    6,283 
Accrued transaction expenses       6,052 
Accrued expenses   11,150    3,563 
Accrued expenses – related party       5,082 
Other current liabilities   815    256 
Total Current Liabilities   25,568    33,645 
Long-term debt, less current portion   1,250    2,999 
Redeemable convertible preferred stock tranche obligation       2,832 
Earnout shares liability   42,438     
Merger warrant liability   26,667     
Other liabilities   1,570    1,959 
Total Liabilities   97,493    41,435 
Commitments and Contingencies (Note 15)        
Redeemable Convertible Preferred Stock:        
Series A Preferred Stock $0.001 stated value; authorized 3,052,127 shares; after recapitalization there are no preferred shares issued or outstanding at March 31,2021 and December 31, 2020        
Stockholders’ Equity (Deficit):         
Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,670,060 and 58,621,042 shares issued and outstanding at March 31, 2021 and December 31, 2020   11    6 
Additional paid-in capital   278,272    20,779 
Accumulated deficit   (49,059)   (34,037)
Accumulated other comprehensive income (loss)   (116)   15 
Treasury stock, $0.001 par value; after recapitalization there are no treasury shares issued or outstanding at March 31, 2021 and December 31, 2020        
Total Stockholders’ Equity (Deficit)   229,108    (13,237)
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)  $326,601   $28,198 

 

 

 

 

CarLotz, Inc. and Subsidiaries — Condensed Consolidated Statements of Operations

 

(unaudited)

 

(In thousands, except per share and share data)

 

   Three Months Ended March 31, 
   2021   2020 
Revenues:        
Retail vehicle sales  $50,383   $21,042 
Wholesale vehicle sales   4,568    3,311 
Finance and insurance, net   1,554    892 
Lease income, net   107    145 
Total Revenues   56,612    25,390 
Cost of sales (exclusive of depreciation)   54,604    22,918 
Gross Profit   2,008    2,472 
Operating Expenses:        
Selling, general and administrative   18,873    3,916 
Stock-based compensation expense   41,963    34 
Depreciation and amortization expense   383    100 
Management fee expense – related party   2    62 
Total Operating Expenses   61,221    4,112 
Loss from Operations   (59,213)   (1,640)
Interest Expense   175    149 
Other Income (Expense), net         
Change in fair value of merger warrants liability   12,358     
Change in fair value of redeemable convertible preferred stock tranche obligation       284 
Change in fair value of earnout provision   31,846     
Other income   162    3 
Total Other Income (Expense), net   44,366    287 
Loss Before Income Tax Expense   (15,022)   (1,502)
Income Tax Expense       5 
Net Loss  $(15,022)  $(1,507)
Net loss per share, basic and diluted  $(0.15)  $(0.03)
Weighted-average shares used in computing net loss per share, basic and diluted   100,817,385    58,621,041 

 

 

 

 

CarLotz, Inc. and Subsidiaries — Condensed Consolidated Statements of Cash Flows

 

(unaudited)

 

(In thousands, except per share and share data)

 

   Three Months Ended March 31, 
   2021   2020 
Cash Flow from Operating Activities          
Net loss  $(15,022)   (1,507)
Adjustments to reconcile net loss to net cash used in operating activities          
Depreciation – property and equipment   105    51 
Amortization and accretion - marketable securities   238     
Depreciation – lease vehicles   15    49 
Loss on marketable securities       13 
Provision for doubtful accounts       6 
Stock-based compensation expense   41,963    34 
Change in fair value of Merger warrants liability   (12,358)   (13)
Change in fair value of earnout shares   (31,846)    
Change in fair value of debt issuance costs and stock warrant       5 
Change in fair value of redeemable convertible preferred stock tranche obligation       (284)
Change in Operating Assets and Liabilities:          
Accounts receivable   (5,192)   1,177 
Inventories   1,991    1,790 
Other current assets   (5,868)   8 
Other assets   (3,038)   9 
Accounts payable   3,140    (325)
Accrued expenses   6,187    (54)
Accrued expenses – related party   (229)   (50)
Other current liabilities   559    67 
Other liabilities   (245)   150 
Net Cash (Used in)/Provided by Operating Activities   (19,600)   1,126 
Cash Flows from Investing Activities          
Purchase of property and equipment   (586)   (10)
Capitalized website and internal-use software costs   (1,154)    
Purchase of marketable securities   (217,689)   (421)
Proceeds from sales of marketable securities   59    18 
Purchase of lease vehicles       (246)
Net Cash Used in Investing Activities   (219,486)   (659)
Cash Flows from Financing Activities          
Payments made on long-term debt       (2)
PIPE Issuance   125,000     
Merger financing   309,999     
Payment made on accrued dividends   (4,853)    
Payments to existing shareholders of Former CarLotz   (62,693)    
Transaction costs and advisory fees   (47,579)    
Payments made on cash considerations associated with stock options   (2,465)    
Repayment of Paycheck Protection Program loan   (1,749)    
Payments made on note payable   (3,000)    
Payments on floor plan notes payable   (11,150)   (8,847)
Borrowings on floor plan notes payable   9,236    7,139 
Net Cash Provided by/(Used in) Financing Activities   310,746    (1,710)
Net Change in Cash and Cash Equivalents Including Restricted Cash   71,776    (1,243)
Cash and cash equivalents and restricted cash, beginning   2,813    4,102 
Cash and cash equivalents and restricted cash, ending  $74,589   $2,859 
Supplemental Disclosure of Cash Flow Information          
Cash paid for interest  $402   $165 
Supplementary Schedule of Non-cash Investing and Financing Activities:          
Transfer from lease vehicles to inventory  $100   $199 
Redeemable convertible preferred stock distributions accrued       457 
KAR/AFC exercise of stock warrants   (144)    
KAR/AFC conversion of notes payable   (3,625)    
Convertible redeemable preferred stock tranche obligation expiration   (2,832)    
Capitalized website and internal use software costs accrues   (1,400)    

 

 

 

 

CarLotz, Inc. and Subsidiaries — Results of Operations, Retail Gross Profit per Unit

 

(unaudited)

 

(In thousands, except per unit metrics)

 

  Three Months Ended March 31, 
  2021   2020   Change   Change 
Revenue:                    
Retail vehicle sales  $50,383   $21,042   $29,341    139%
Wholesale vehicle sales   4,568    3,311    1,257    38%
Finance and insurance, net   1,554    892    662    74%
Lease income, net   107    145    (38)   (26)%
Total revenues   56,612    25,390    31,222    123%
Cost of sales:                  
Retail vehicle cost of sales  $48,917   $19,555   $29,362    150%
Wholesale vehicle cost of sales   5,687    3,363    2,324    69%
Total cost of sales  $54,604   $22,918   $31,686    138%
Gross profit:                  
Retail vehicle gross profit  $1,466   $1,487   $(21)   (1)%
Wholesale vehicle gross profit   (1,119)   (52)   (1,067)   (2052)%
Finance and insurance gross profit   1,554    892    662    74%
Lease income, net   107    145    (38)   (26)%
Total gross profit  $2,008   $2,472   $(464)   (19)%
                     
Retail gross profit per unit(1):                 
Retail vehicles gross profit  $1,466   $1,487    (21)   (1)%
Finance and insurance gross profit   1,554    892    662    74%
Total retail vehicles and finance and insurance gross profit   3,020    2,379    641    27%
                     
Retail vehicles unit sales   2,554    1,453    (1,101)   (76)%
Retail vehicles gross profit per unit  $1,182   $ 1,637   $ (455)   (28)%

 

(1) Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is                        divided by the total number of retail vehicles sold in the period.

 

 

 

 

CarLotz, Inc. and Subsidiaries — EBITDA and Adjusted EBITDA

 

(unaudited)

 

(In thousands, except share data)

 

   Three Months Ended 
   2021   2020   Change 
Net Loss Attributable to Common Stockholders  $(15,022)  $(1,507)  $(13,515)
Adjusted to exclude the following:               
Interest expense   175    149    26 
Income tax expense       5    (5)
Depreciation and amortization expense   383    100    283 
EBITDA  $(14,464)  $(1,253)  $(13,211)
Other expense   (162)   (3)   (159)
Stock compensation expense   41,963    34    41,929 
Management fee expense - related party   2    62    (60)
Change in fair value of warrants liability   (12,358)       (12,358)
Change in fair value of redeemable convertible preferred stock tranche obligation       (284)   284 
Change in fair value of earnout provision   (31,846)       (31,846)
Adjusted EBITDA  $(16,865)  $(1,444)  $(15,421)